AMENDMENT NO. 2 AND WAIVER TO LOAN AGREEMENT


         AMENDMENT NO. 2 AND WAIVER TO LOAN AGREEMENT (this "Second Amendment"),
made and executed this 10th day of January,  2000, by and between:

         OMEGA WORLDWIDE, INC., a Maryland corporation (the "Borrower");

         The Banks that have executed the signature pages hereto  (individually,
a "Bank" and collectively, the "Banks"); and

         FLEET BANK,  N.A.,  a national  banking  association,  as Agent for the
Banks (in such  capacity,  together with its  successors in such  capacity,  the
"Agent").


                             PRELIMINARY STATEMENTS

         (A) The  Borrower  has  entered  into a certain  Loan  Agreement  dated
November 20, 1998, as amended by Amendment No. 1 to Loan Agreement dated October
22, 1999,  effective as of August 18, 1999 (as so amended,  hereinafter referred
to as the "Loan Agreement") with the Agent and the Banks; and

         (B) The  Borrower  has  requested  that the Banks and the Agent waive a
certain  Event of  Default  under,  and amend  certain  provisions  of, the Loan
Agreement,  and the Banks and the Agent are  willing  to do so, all on the terms
and conditions hereinafter set forth;

         NOW,  THEREFORE,  in  consideration  of the  agreements  and provisions
contained herein, the parties hereto hereby agree as follows:

         1.       Definitions.      Capitalized  terms used but not otherwise
defined herein shall have the meanings  ascribed to such terms in the Loan
Agreement.

         2. Certain  Amendments to Loan Agreement.  The Loan Agreement is hereby
amended as follows:

                  2.1. The definition of "Total Commitment" appearing in Article
1 is amended by deleting the amount "Twenty-Five Million ($25,000,000)  Dollars"
and substituting therefor the amount "Twenty Million ($20,000,000) Dollars".

                  2.2.  The phrase  "the amount set forth  opposite  such Bank's
name on the  signature  pages  hereof"  appearing in the  definition of the term
"Revolving Credit Commitment" in Article 1 of the Loan Agreement shall be deemed
to refer to the amounts  set forth  opposite  each Bank's name on the  signature
pages hereto.

         3. Waiver.  The Borrower has advised the Agent of the  occurrence of an
Event of Default  under  Section  8.11 of the Loan  Agreement as a result of the
failure by Omega to maintain an investment grade Rating from at least two of the
three Ratings Agencies.

                  The Banks and the Agent hereby waive  non-compliance  by Omega
of Section 8.11 of the Loan  Agreement  for the period  commencing  December 29,
1999 through and including March 17, 2000; provided, however, the waiver granted
herein is limited to the matter  expressly  stated above and shall not be deemed
to be a waiver of any future  violations of Section 8.11 after March 17, 2000 or
a waiver of any violation of any other provisions of the Loan Agreement.

         4. Representations and Warranties. In order to induce the Banks and the
Agent to enter  into this  Second  Amendment,  each of the Loan  Parties  hereby
represents and warrants to the Banks and the Agent that:

                  4.1 No Default.  After giving effect to this Second Amendment,
no Default or Event of Default shall have occurred or be continuing.

                  4.2 Existing  Representations  and Warranties.  As of the date
hereof and after giving effect to this Second  Amendment,  each and every one of
the  representations  and  warranties  set forth in the Loan Documents are true,
accurate and complete in all respects and with the same effect as though made on
the date hereof, and each is hereby  incorporated herein in full by reference as
if restated herein in its entirety, except for changes in the ordinary course of
business which are not prohibited by the Loan Agreement (as amended  hereby) and
which do not, either singly or in the aggregate, have a Material Adverse Effect.

                  4.3 Authority; Enforceability. (i) The execution, delivery and
performance  by each  Loan  Party  of  this  Second  Amendment  are  within  its
organizational  powers and have been duly  authorized  by all  necessary  action
(corporate  or  otherwise)  on the part of each Loan  Party,  (ii)  this  Second
Amendment  is the  legal,  valid and  binding  obligation  of each  Loan  Party,
enforceable against each Loan Party in accordance with its terms, and (iii) this
Second Amendment and the execution,  delivery and performance by each Loan Party
thereof does not:  (A)  contravene  the terms of any Loan  Party's  organization
documents, (B) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document  evidencing any contractual  obligation
to which any Loan Party is a party or any order,  injunction,  writ or decree to
which any Loan Party or its property is subject,  or (C) violate any requirement
of law.

         5.       Reference to and Effect Upon the Loan Agreement.

                  5.1 Effect.  Except as specifically set forth herein, the Loan
Agreement and the other Loan Documents  shall remain in full force and effect in
accordance with their terms and are hereby ratified and confirmed.

                  5.2  No  Waiver;  References.  The  execution,   delivery  and
effectiveness  of this  Second  Amendment  shall not  operate as a waiver of any
right,  power or remedy of the Agent or any Bank under the Loan  Agreement,  nor
constitute  a  waiver  of  any  provision  of  the  Loan  Agreement,  except  as
specifically set forth herein.  Upon the effectiveness of this Second Amendment,
each reference in:

                           (i)      the Loan  Agreement  to "this  Agreement",
"hereunder",  "hereof",  "herein"  or words of  similar import shall mean and be
a reference to the Loan Agreement as  amended hereby;

                           (ii) the other Loan Documents to the "Loan Agreement"
shall mean and be a reference to the Loan
Agreement as amended hereby; and

                           (iii)  the Loan  Documents  to the  "Loan  Documents"
shall be deemed to include this Second Amendment.

         6.       Miscellaneous.

                  6.1  Expenses.  The Loan  Parties  agree to pay the Agent upon
demand for all reasonable  expenses,  including  reasonable  attorneys' fees and
expenses of the Agent, incurred by the Agent in connection with the preparation,
negotiation and execution of this Second Amendment.

                  6.2.     Law. THIS SECOND  AMENDMENT  SHALL BE CONSTRUED IN
ACCORDANCE  WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.

                  6.3  Successors.  This Second  Amendment shall be binding upon
the Loan Parties,  the Banks and the Agent and their  respective  successors and
assigns,  and shall inure to the benefit of the Loan Parties,  the Banks and the
Agent and the successors and assigns of the Banks and the Agent.

                  6.4 Execution in  Counterparts.  This Second  Amendment may be
executed  in any  number of  counterparts  and by  different  parties  hereto in
separate  counterparts,  each of which when so executed and  delivered  shall be
deemed to be an original and all of which taken  together  shall  constitute one
and the same instrument.

         IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Second
Amendment to be executed and delivered by their  respective  officers  thereunto
duly authorized as of the date first written above.


<PAGE>

                              OMEGA WORLDWIDE, INC.


                                          By  /s/ Edward C. Noble
                                              -------------------
                                                             Title



Revolving Credit Commitment:                FLEET BANK, N.A., as Agent and as
                                                        a Bank
  $12,000,000

                                             By  /s/ Christian Covello
                                                 ----------------------
                                                                  Title


Revolving Credit Commitment:                HARRIS TRUST AND SAVINGS BANK

  $8,000,000
                                             By   /s/ Kirby M. Law
                                                  -----------------
                                                              Title


Agreed to and Accepted:

OMEGA HEALTHCARE INVESTORS, INC.


By  /s/ David A. Stover
    -------------------
                  Title